Replidyne Inc. closed its largest financing, a $40 million second round, and concurrently in-licensed a late-stage compound to treat bacterial infections.

Replidyne obtained exclusive rights to faropenem daloxate from Tokyo-based Daiichi Suntory Pharma in the U.S. and Canada, retaining an exclusive option for rights everywhere but Japan. It will become the company's lead product and could reach the market sometime after 2006, when the filing of a new drug application is expected.

Financial terms of the in-licensing deal were not disclosed, but it includes a standard up-front payment and potential milestone and royalty payments down the road for Daiichi.

"Really, the strategy here is to develop a pipeline of antibacterial products," said Kenneth Collins, president and CEO of Louisville, Colo.-based Replidyne. "We see an opportunity with many of the large pharmaceutical companies decreasing their efforts in the antibacterial space or exiting the space altogether, coupled with the fact that the bacteria are continuing to develop resistance to existing antibacterial drugs."

The financing and in-licensing agreements are "inter-related," Collins said. Replidyne will use the funds to advance faropenem daloxate through the clinic, as the company conducts another Phase II trial for the product this year, then moves it into Phase III trials early next year.

"The indications we'll be going after are adult respiratory tract indications," Collins told BioWorld Today.

That includes acute sinusitis, acute exacerbations of chronic bronchitis and community-acquired pneumonia. Replidyne also will work to develop a pediatric formulation of the product for common bacterial infections. It intends to seek a marketing partner to reach the "large markets," Collins said.

From Daiichi, Replidyne gains access to the preclinical and clinical data generated to date, and it entered a supply arrangement with the drug substance manufacturer. Bayer Healthcare, a unit of Leverkusen, Germany-based Bayer AG, once licensed the product and conducted a number of Phase III studies. To date, faropenem daloxate has been tested in more than 4,000 patients.

An orally administered penem, faropenem daloxate has excellent in vitro activity against Gram-positive and Gram-negative organisms, including common respiratory tract pathogens and strains that show resistance to other beta-lactam antibiotics, the company said.

A report last month by the Infectious Diseases Society of America (IDSA) said policymakers are addressing the need to spur research and development for biodefense, but they also should recognize the need for new therapies against drug-resistant bacteria. Smallpox, for instance, has not been seen since the 1970s, while about 2 million people in U.S. hospitals acquire bacterial infections each year, resulting in 90,000 deaths. About 70 percent of the infections are resistant to at least one drug, the IDSA said.

Some pharmaceutical companies are losing interest in the market because antibiotics are not as profitable as drugs for chronic care conditions.

"This trend of fewer antibiotics being approved for the past 10 years or so is especially alarming to the physicians who see more and more resistance," said Nebojsa Janjic, senior vice president of research and development at Replidyne.

The company sees an opportunity with faropenem daloxate because it is an ester prodrug derivative of faropenem that offers an improved oral availability and leads to higher systemic concentrations of the drug. It was discovered by scientists at Suntory Institute for Biomedical Research, which now is Daiichi Suntory.

Replidyne's $40 million financing also will help advance a methionyl tRNA synthetase inhibitor that the company acquired in 2003 from GlaxoSmithKline plc, of London. That candidate should move into the clinic during the first half of next year, Collins said.

Funds also will help the company move forward with compounds that inhibit bacterial DNA replication. They are earlier stage and several years away from reaching the clinic.

The financing will last the company through the end of 2005 and possibly into the first part of 2006, Collins said.

New investor TPG Ventures, of San Francisco, led the round, which included a significant investment from another new investor, New York-based Perseus-Soros Biopharmaceutical Fund. Existing investors that participated were HealthCare Ventures LLC, of Princeton, N.J.; Morgenthaler Ventures, of Menlo Park, Calif.; and Sequel Venture Partners, of Boulder, Colo.

In connection with the financing, Geoffrey Duyk, of TPG, and Christopher Earl, of Perseus-Soros, joined Replidyne's board.

The company, which was founded in 2000, raised $13 million in a Series A financing conducted in 2002, bringing its total raised to date to $53 million. (See BioWorld Today, April 26, 2002.)

No Comments